2015 Founders’ Letter

Larry Page, CEO, Alphabet

In August, I announced Alphabet and our new
structure and shared my thoughts on how we were
thinking about the future of our business. (It is
reprinted
here in case you missed it, as it seems to apply
just as much today). I’m really pleased with how
Alphabet is going. I am also very pleased with
Sundar’s performance as our new Google CEO. Since the
majority of our big bets are in Google, I wanted to
give him most of the bully-pulpit here to reflect on
Google’s accomplishments and share his vision. In the
future, you should expect that Sundar, Sergey and I
will use this space to give you a good personal
overview of where we are and where we are going.

Sundar Pichai, CEO, Google

When Larry and Sergey founded Google in 1998, there
were about 300 million people online. By and large,
they were sitting in a chair, logging on to a
desktop machine, typing searches on a big keyboard
connected to a big, bulky monitor. Today, that
number is around 3 billion people, many of them
searching for information on tiny devices they
carry with them wherever they go.

In many ways, the founding mission of Google back
in ’98 — “to organize the world’s information and
make it universally accessible and useful” — is
even truer and more important to tackle today, in a
world where people look to their devices to help
organize their day, get them from one place to
another, and keep in touch. The mobile phone really
has become the remote control for our daily lives,
and we’re communicating, consuming, educating, and
entertaining ourselves, on our phones, in ways
unimaginable just a few years ago.

Knowledge for everyone: search and assistance

As we said when we announced Alphabet, “the new
structure will allow us to keep tremendous focus on
the extraordinary opportunities we have inside of
Google.” Those opportunities live within our
mission, and today we are about one thing above all
else: making information and knowledge available
for everyone.

This of course brings us to Search — the very core
of this company. It’s easy to take Search for
granted after so many years, but it’s amazing to
think just how far it has come and still has to go.
I still remember the days when 10 bare blue links
on a desktop page helped you navigate to different
parts of the Internet. Contrast that to today,
where the majority of our searches come from
mobile, and an increasing number of them via voice.
These queries get harder and harder with each
passing year — people want more local, more
context-specific information, and they want it at
their fingertips. So we’ve made it possible for you
to search for [Leonardo diCaprio movies] or [Zika
virus] and get a rich panel of facts and visuals.
You can also get answers via Google Now — like the
weather in your upcoming vacation spot, or when you
should leave for the airport — without you even
needing to ask the question.

Helping you find information that gets you through
your day extends well beyond the classic search
query. Think, for example, of the number of photos
you and your family have taken throughout your
life, all of your memories. Collectively, people
will take 1 trillion photos this year with their
devices. So we launched Google Photos to make it
easier for people to organize their photos and
videos, keep them safe, and be able to find them
when they want to, on whatever device they are
using. Photos launched less than a year ago and
already has more than 100 million monthly active
users. Or take Google Maps. When you ask us about a
location, you don’t just want to know how to get
from point A to point B. Depending on the context,
you may want to know what time is best to avoid the
crowds, whether the store you’re looking for is
open right now, or what the best things to do are
in a destination you’re visiting for the first
time.

But all of this is just a start. There is still
much work to be done to make Search and our Google
services more helpful to you throughout your day.
You should be able to move seamlessly across Google
services in a natural way, and get assistance that
understands your context, situation, and needs —
all while respecting your privacy and protecting
your data. The average parent has different needs
than the average college student. Similarly, a user
wants different help when in the car versus the
living room. Smart assistance should understand all
of these things and be helpful at the right time,
in the right way.

The power of machine learning and artificial
intelligence

A key driver behind all of this work has been our
long-term investment in machine learning and AI.
It’s what allows you to use your voice to search
for information, to translate the web from one
language to another, to filter the spam from your
inbox, to search for “hugs” in your photos and
actually pull up pictures of people hugging ... to
solve many of the problems we encounter in daily
life. It’s what has allowed us to build products
that get better over time, making them increasingly
useful and helpful.

We’ve been building the best AI team and tools for
years, and recent breakthroughs will allow us to do
even more. This past March, DeepMind’s AlphaGo took
on Lee Sedol, a legendary Go master, becoming the
first program to beat a professional at the most
complex game mankind ever devised. The implications
for this victory are, literally, game changing —
and the ultimate winner is humanity. This is
another important step toward creating artificial
intelligence that can help us in everything from
accomplishing our daily tasks and travels, to
eventually tackling even bigger challenges like
climate change and cancer diagnosis.

More great content, in more places

In the early days of the Internet, people thought
of information primarily in terms of web pages. Our
focus on our core mission has led us to many
efforts over the years to improve discovery,
creation, and monetization of content — from
indexing images, video, and the news, to building
platforms like Google Play and YouTube. And with
the migration to mobile, people are watching more
videos, playing more games, listening to more
music, reading more books, and using more apps than
ever before.

That’s why we have worked hard to make YouTube and
Google Play useful platforms for discovering and
delivering great content from creators and
developers to our users, when they want it, on
whatever screen is in front of them. Google Play
reaches more than 1 billion Android users. And
YouTube is the number-one destination for video —
over 1 billion users per month visit the site — and
ranks among the year’s most downloaded mobile apps.
In fact, the amount of time people spend watching
videos on YouTube continues to grow rapidly — and
more than half of this watchtime now happens on
mobile. As we look to the future, we aim to provide
more choice to YouTube fans — more ways for them to
engage with creators and each other, and more ways
for them to get great content. We’ve started down
this journey with specialized apps like YouTube
Kids, as well as through our YouTube Red
subscription service, which allows fans to get all
of YouTube without ads, a premium YouTube Music
experience and exclusive access to new original
series and movies from top YouTube creators like
PewDiePie and Lilly Singh.

We also continue to invest in the mobile web —
which is a vital source of traffic for the vast
majority of websites. Over this past year, Google
has worked closely with publishers, developers, and
others in the ecosystem to help make the mobile web
a smoother, faster experience for users. A good
example is the Accelerated Mobile Pages (AMP)
project, which we launched as an open-source
initiative in partnership with news publishers, to
help them create mobile-optimized content that
loads instantly everywhere. The other example is
Progressive Web Apps (PWA), which combine the best
of the web and the best of apps—allowing companies
to build mobile sites that load quickly, send push
notifications, have home screen icons, and much
more. And finally, we continue to invest in
improving Chrome on mobile — in the four short
years since launch, it has just passed 1 billion
monthly active users on mobile.

Of course, great content requires investment.
Whether you’re talking about Google’s web search,
or a compelling news article you read in The New
York Times or The Guardian, or watching a video on
YouTube, advertising helps fund content for
millions and millions of people. So we work hard to
build great ad products that people find useful —
and that give revenue back to creators and
publishers.

Powerful computing platforms

Just a decade ago, computing was still synonymous
with big computers that sat on our desks. Then,
over just a few years, the keys to powerful
computing — processors and sensors — became so
small and cheap that they allowed for the
proliferation of supercomputers that fit into our
pockets: mobile phones. Android has helped drive
this scale: it has more than 1.4 billion
30-day-active devices — and growing.

Today’s proliferation of “screens” goes well beyond
phones, desktops, and tablets. Already, there are
exciting developments as screens extend to your
car, like Android Auto, or your wrist, like Android
Wear. Virtual reality is also showing incredible
promise — Google Cardboard has introduced more than
5 million people to the incredible, immersive and
educational possibilities of VR.

Looking to the future, the next big step will be
for the very concept of the “device” to fade away.
Over time, the computer itself — whatever its form
factor — will be an intelligent assistant helping
you through your day. We will move from mobile
first to an AI first world.

Enterprise

Most of these computing experiences are very likely
to be built in the cloud. The cloud is more secure,
more cost effective, and it provides the ability to
easily take advantage of the latest technology
advances, be it more automated operations, machine
learning, or more intelligent office productivity
tools.

Google started in the cloud and has been investing
in infrastructure, data management, analytics, and
AI from the very beginning. We now have a broad and
growing set of enterprise offerings: Google Cloud
Platform (GCP), Google Apps, Chromebooks, Android,
image recognition, speech translation, maps,
machine learning for customers’ proprietary data
sets, and more. Our customers like Whirlpool, Land
O’Lakes and Spotify are transforming their
businesses by using our enterprise productivity
suite of Google Apps and Google Cloud Platform
services.

As we look to our long-term investments in our
productivity tools supported by our machine
learning and artificial intelligence efforts, we
see huge opportunities to dramatically improve how
people work. Your phone should proactively bring up
the right documents, schedule and map your
meetings, let people know if you are late, suggest
responses to messages, handle your payments and
expenses, etc.

Building for everyone

Whether it’s a developer using Google Cloud
Platform to power their new application, or a
creator finding new income and viewers via YouTube,
we believe in leveling the playing field for
everyone. The Internet is one of the world’s most
powerful equalizers, and we see it as our job to
make it available to as many people as possible.

This belief has been a core Google principle from
the very start — remember that Google Search was in
the hands of millions long before the idea for
Google advertising was born. We work on advertising
because it’s what allows us to make our services
free; Google Search works the same for anyone with
an Internet connection, whether it is in a modern
high-rise or a rural schoolhouse.

Making this possible is a lot more complicated than
simply translating a product or launching a local
country domain. Poor infrastructure keeps billions
of people around the world locked out of all of the
possibilities the web may offer them. That’s why we
make it possible for there to be a $50 Android
phone, or a $100 Chromebook. It’s why this year we
launched Maps with turn-by-turn navigation that
works even without an Internet connection, and made
it possible for people to get faster-loading,
streamlined Google Search if they are on a slower
network. We want to make sure that no matter who
you are or where you are or how advanced the device
you are using ... Google works for you.

In all we do, Google will continue to strive to
make sure that remains true — to build technology
for everyone.
Farmers in Kenya use Google Search to keep up with
crop prices and make sure they can make a good
living. A classroom in Wisconsin can take a field
trip to the Sistine Chapel ... just by holding a
pair of Cardboard goggles. People everywhere can
use their voices to share new perspectives, and
connect with others, by creating and watching
videos on YouTube. Information can be shared —
knowledge can flow — from anyone, to anywhere. In
17 years, it’s remarkable to me the degree to which
the company has stayed true to our original vision
for what Google should do, and what we should
become.

For us, technology is not about the devices or the
products we build. Those aren’t the end-goals.
Technology is a democratizing force, empowering
people through information. Google is an
information company. It was when it was founded,
and it is today. And it’s what people do with that
information that amazes and inspires me every day.

Sundar Pichai
CEO, Google

Larry’s Alphabet Letter

G is for Google.

As Sergey and I wrote in the original founders
letter 11 years ago, “Google is not a conventional
company. We do not intend to become one.” As part
of that, we also said that you could expect us to
make “smaller bets in areas that might seem very
speculative or even strange when compared to our
current businesses.” From the start, we’ve always
strived to do more, and to do important and
meaningful things with the resources we have.

We did a lot of things that seemed crazy at the
time. Many of those crazy things now have over a
billion users, like Google Maps, YouTube, Chrome,
and Android. And we haven’t stopped there. We are
still trying to do things other people think are
crazy but we are super excited about.

We’ve long believed that over time companies tend
to get comfortable doing the same thing, just
making incremental changes. But in the technology
industry, where revolutionary ideas drive the next
big growth areas, you need to be a bit
uncomfortable to stay relevant.

Our company is operating well today, but we think
we can make it cleaner and more accountable. So we
are creating a new company, called Alphabet. I
am really excited to be running Alphabet as CEO
with help from my capable partner, Sergey, as
President.

What is Alphabet? Alphabet is mostly a collection
of companies. The largest of which, of course, is
Google. This newer Google is a bit slimmed down,
with the companies that are pretty far afield of
our main internet products contained in Alphabet
instead. What do we mean by far afield? Good
examples are our health efforts: Life Sciences
(that works on the glucose-sensing contact lens),
and Calico (focused on longevity).
Fundamentally, we believe this allows us more
management scale, as we can run things
independently that aren’t very related.

Alphabet is about businesses prospering through
strong leaders and independence. In general, our
model is to have a strong CEO who runs each
business, with Sergey and me in service to them as
needed. We will rigorously handle capital
allocation and work to make sure each business is
executing well. We’ll also make sure we have a
great CEO for each business, and we’ll determine
their compensation. In addition, with this new
structure we plan to implement segment reporting
for our Q4 results, where Google financials will be
provided separately than those for the rest of
Alphabet businesses as a whole.

This new structure will allow us to keep tremendous
focus on the extraordinary opportunities we have
inside of Google. A key part of this is Sundar
Pichai. Sundar has been saying the things I would
have said (and sometimes better!) for quite some
time now, and I’ve been tremendously enjoying our
work together. He has really stepped up since
October of last year, when he took on product and
engineering responsibility for our internet
businesses. Sergey and I have been super excited
about his progress and dedication to the company.
And it is clear to us and our board that it is time
for Sundar to be CEO of Google. I feel very
fortunate to have someone as talented as he is to
run the slightly slimmed down Google and this frees
up time for me to continue to scale our
aspirations. I have been spending quite a bit of
time with Sundar, helping him and the company in
any way I can, and I will of course continue to do
that. Google itself is also making all sorts of new
products, and I know Sundar will always be focused
on innovation—continuing to stretch boundaries. I
know he deeply cares that we can continue to make
big strides on our core mission to organize the
world’s information. Recent launches like Google
Photos and Google Now using machine learning are
amazing progress. Google also has some services
that are run with their own identity, like YouTube.
Susan is doing a great job as CEO, running a strong
brand and driving incredible growth.

Sergey and I are seriously in the business of
starting new things. Alphabet will also include our
X lab, which incubates new efforts like Wing, our
drone delivery effort. We are also stoked about
growing our investment arms, Ventures and Capital,
as part of this new structure.

Alphabet Inc. will replace Google Inc. as the
publicly-traded entity and all shares of Google
will automatically convert into the same number of
shares of Alphabet, with all of the same rights.
Google will become a wholly-owned subsidiary of
Alphabet. Our two classes of shares will continue
to trade on Nasdaq as GOOGL and GOOG.

For Sergey and me this is a very exciting new
chapter in the life of Google—the birth of
Alphabet. We liked the name Alphabet because it
means a collection of letters that represent
language, one of humanity’s most important
innovations, and is the core of how we index with
Google search! We also like that it means alpha‑bet
(Alpha is investment return above benchmark), which
we strive for! I should add that we are not
intending for this to be a big consumer brand with
related products—the whole point is that Alphabet
companies should have independence and develop
their own brands.

We are excited about...

Getting more ambitious things done.

Taking the long-term view.

Empowering great entrepreneurs and companies to
flourish.

Investing at the scale of the opportunities and
resources we see.

Improving the transparency and oversight of
what we’re doing.

Making Google even better through greater
focus.

And hopefully... as a result of all this,
improving the lives of as many people as we can.

What could be better? No wonder we are excited to
get to work with everyone in the Alphabet family.
Don’t worry, we’re still getting used to the name
too!